No Christmas Bailout For Stuy Town

The Post reports that Tishman Speyer "failed to get a $1.5 billion Christmas bailout they had hoped to collect from Uncle Sam...to cover a cash shortfall" on Stuyvesant Town-Peter Cooper Village. In October, the state's highest court ruled that Tishman improperly charged market rates on previously rent-stabilized apartments while getting tax subsidies. The Post adds, "As of last month, the owners had just $6.75 million left in reserves for StuyTown, according to credit rating agency RealPoint. That isn't enough even to cover December's costs, which include more than 6 percent interest on a $3 billion loan." The complex has 11,000 apartments.

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By Jen Chung in News on December 25, 2009 1:18 PM

Comments [rss]

NattyB

Everything will be fine, just not for Tishman.

The operating income is sufficient to run the property as is. However, the operating income is woefully insufficient to pay off the ridic amount of debt Tishman took on (or rather their investors' took on, Tishman has very little money of their own in this deal) to acquire the property.

This is bad news for like the Singapore Sovereign Wealth Fund and other players (I think Calpers too?), but, it's all good news for the tenants' i'd reckon.

ribaldry

Good thing Obama stole 27 trillion from the citizens of the USA to pay his banker friends.

Mookie Wilson

You do realize that the bank bailouts began before Obama took office and without them we would likely be in the middle of a worldwide depression, right?

adpwnage

Dude, why are you spamming every freaking article? GROW UP! How is he giving money to his banker friends? Those "friends" would love to see Obama fail. Every last one of them is trying to repay what they were given so they can go back to paying their CEOS the big bucks. Have you even seen the news? Oh that's right, you are a Fox viewer right?

JacqueMehoff

they asked for a bailout?

don't they have any shame? let me guess who they voted for?

oh forgive me, that's as much private info as to see what's in your grocery cart for some people.

Mr Mel

I think the courts will assign the property to another management company. That firm will collect the rents and hopefully allocate the funds properly. The tenants could conceivably wind up in a better position possibly with a say in the matter.

Spirit of 76

I don't think the courts have a say in the matter. If it's foreclosed on, the banks own it. They will have total control.

Mr Mel

The courts have everything to say about it. The banks are creditors.

Spirit of 76

That's just it. The creditors will become the legal owners of Stuy Town if Tishman defaults, same as any other foreclosure. The only thing the courts can rule on is whether the rent stabilization was illegally circumvented. They can't wrest control of the property from legal owners, otherwise they would already have done so with Tishman.

harrisgraber

Tishman Speyer was greedy. I have no sympathy for them. They deserve to go belly up. I am concerned about the tenants, though. What happens to them if Tishman goes bankrupt?

Spirit of 76

Foreclosure. Then the creditors step in and take over the complex, probably try to unload it ASAP on another party to recoup their money. Whether that would be an improvement is open for debate. But Tishman won't go belly up. This situation just covers one property. It's like somebody not paying his mortgage. The bank can take his house, but they can't touch his car, business or other assets.